Xiaomi Unveils Dual AI Models, but the Market Demands More Than Open-Source Ambitions

Xiaomi open-sources two major AI frameworks and preps a flagship with an 8,000 mAh battery, but shares fall 22% YTD as investors eye costs.

Xiaomi is firing on all strategic cylinders — open-sourcing two major artificial intelligence frameworks in quick succession and prepping a flagship smartphone with a record battery — yet its stock remains stuck in a prolonged slide. On Thursday, the shares traded at €3.48, down 2.74 percent on the day and 22.46 percent lower since the start of the year. The disconnect between corporate ambition and market sentiment has rarely been starker.

The Beijing-based company this week released its OneVL framework for autonomous driving as open source. The system fuses vision-language-action (VLA) perception with world models to help vehicles interpret traffic scenes, generate driving maneuvers and predict the evolution of a situation. Xiaomi chief Lei Jun promised full access to the model and source code, extending a recent open-source push that also saw the Omnivoice audio-generation tool made public. Days earlier, the company had published its MiMo-V2.5 family under an MIT license, with the Pro model boasting 1.02 trillion total parameters — 42 billion active — and a context window of one million tokens. That model ranked first in the Artificial Analysis Intelligence Index, a strong technical credential.

Both releases are meant to tighten Xiaomi’s ecosystem: OneVL targets its electric-vehicle business, while MiMo-V2.5 is designed for agentic multimodal applications across smartphones and services. But the share price barely reacted. Investors appear focused on the cost side of the equation. Xiaomi has committed to a research budget of 200 billion yuan, with over 60 billion yuan earmarked for AI over three years. Open-source strategies can build developer mindshare, but they do not immediately light up the profit-and-loss statement.

On the hardware front, Xiaomi is doubling down on premium devices that can command higher prices. The Xiaomi 17 Max, set to launch before the end of May, will pack a 6.9-inch flat display with near-2K resolution via an RGB subpixel arrangement. The standout feature is an 8,000 mAh battery, supported by 100-watt wired and 50-watt wireless charging. A Snapdragon 8 Elite Gen 5 processor will power the device, and the Xiaomi Band 10 Pro is also expected alongside it. The company is trying to offset cost inflation in memory components: Samsung and SK Hynix have raised DRAM prices by up to 60 percent, and TrendForce sees a more than 50 percent increase for DRAM this year. That could push smartphone and laptop prices 10 to 20 percent higher — pressure that Xiaomi must pass through without killing demand. Its premium positioning appears to be working in China, where the Xiaomi 17 Pro Max grabbed the top spot in the segment above 6,000 renminbi.

Meanwhile, the electric-vehicle division continues to advance. Xiaomi plans to enter Europe in the second half of 2027, starting with Germany, followed by right-hand-drive markets such as the UK, Japan, Australia and India in early 2028. To secure its battery supply chain, it has set up Beijing Xiaomi Jingxu Technology, a subsidiary tasked with building a battery factory with an annual capacity of 15 gigawatt-hours — a critical move given that traction batteries account for 35 to 45 percent of vehicle cost. The EV segment is targeting 550,000 deliveries, and last quarter consolidated revenue edged up 7.2 percent to nearly 116.917 billion yuan.

The company is trying to prop up its shares through buybacks. On May 5, it repurchased more than 3.29 million Class-B shares for 100 million Hong Kong dollars. An automated plan with a potential volume of up to 2.5 billion Hong Kong dollars is in place, bringing year-to-date repurchases to roughly 4.7 billion Hong Kong dollars — already close to two-thirds of the 6.3 billion spent in all of 2024. Yet the stock still trades 1.33 percent below its short-term moving average of €3.55 and 22.92 percent below its long-term line of €4.56. The relative strength index of 53.6 points to no extreme oversold or overbought condition.

The next major test comes on May 26, when the board will review unaudited first-quarter results. Analysts will scrutinize whether premium smartphone pricing and EV volumes can translate into expanding margins. For now, Xiaomi has delivered the technology story — but the market is waiting for the earnings proof to match.